WASHINGTON – Applications for unemployment benefits in the U.S. were little changed last week, hovering close to four- decade lows and showing steady progress in the labor market.
Jobless claims increased by 1,000 to 260,000 in the week ended Oct. 24, less than the median forecast in a Bloomberg survey, a Labor Department report showed Thursday. The four-week average of applications dropped to the lowest level since December 1973, while the number of Americans on benefit rolls shrank.
Tight demand for labor is encouraging employers to retain workers even as slower sales to overseas customers cause some companies to slow the pace of hiring. Federal Reserve policy makers said Wednesday that while job growth has recently cooled, excess slack in the labor market is gradually shrinking, leaving open the possibility of an interest-rate increase as soon as December.
“Job destruction is really not that big of an issue,” Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Fla., said before the report. “The claims numbers have been trending incredibly low.”
The median forecast of 47 economists in the Bloomberg survey called for 265,000 claims, with estimates ranging from 254,000 to 275,000.
The four-week average of claims, a less-volatile measure than the weekly figure, fell to 259,250 from 263,250 the week before.
Continuing claims
The number of people continuing to receive jobless benefits decreased by 37,000 in the week ended Oct. 17 to 2.14 million, the fewest since November 2000.
In that same period, the unemployment rate among people eligible for benefits held at 1.6 percent.
Another report Thursday showed the economy slowed in the third quarter as companies took advantage of consumer demand to trim inventories. Gross domestic product rose at a 1.5 percent annualized rate during the period after growing 3.9 percent in the second quarter.
The Fed is debating raising interest rates for the first time since 2006, using data on the labor market and inflation to guide its decision.
Central bankers said Wednesday they will consider tightening policy at their next meeting in December without making a commitment to act this year. The Federal Open Market Committee noted that “labor market indicators, on balance, show that underutilization of labor resources has diminished since early this year,” in a statement following a two-day meeting in Washington.
